The luxury market is having a tough time of late due to the credit crunch. Can people still afford to spend outrageous sums at 7-star hotels, fly a Gulfstream jet to private islands, and own a closet-full of designer gear that could make you cry? Apparently yes. These lucky individuals are HNWI (high net worth individuals), they’re super rich and price insensitive. And it’s thanks to them that luxury brands can withstand the global crisis and maintain longevity.
Surprisingly, many HNWIs are from emerging markets and they’re also young in their 30s. Luxury companies are focusing their energy in these new markets: Cartier, brand-building in India; Matthew Williamson foregoing LA to launch instead in Kuwait and Dubai; Harvey Nichols opening in Kuwait (with stores already in Riyadh, Hong Kong, Dubai, Istanbul and Jakarta); Stella McCartney in Jakarta and Singapore; Kempinski Hotels in Jordan; and One & Only Resorts dotted in sublime locations. Imagine Louis Vuitton has 7 stores in Hong Kong, a tiny island of 1095 sq km! Designer denims now also cost a fortune – Tom Ford jeans retailed at $990 USD with 18-carat gold buttons, and Balmain jeans at a credit-crunch defying $1,370 USD. Whatever happened to normal denims??
As luxury hotels, spas, restaurants and brands continue to extend their presence, it doesn’t appear to be the end. On the contrary, the focus is now how to offer value and quality beyond the basics – personal concierge services, bespoke products, exclusivity, innovation and specialization. It’s about surprising your customer and building the ultimate environment.
My favourite has to be Caudalie’s innovative approach at the Plaza Hotel in New York. Caudalie, a French spa brand with patented treatments using wine grapes (vinotherapy), has created the ultimate well-being spa environment: a wine lounge selling European wines, a sommelier offering wine-tasting and classes, and a variety of food tastings from the vineyard areas of France, Italy and Spain. Now that’s what I call luxury!